Thursday, March 16, 2017

Who will Trump nominate? Perhaps …

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Who will Trump nominate? Perhaps …

Two months into the Trump Administration, the Washington Post says his nomination process, leading to Senate confirmation, is moving more slowly than any in history. The New York Times describes “dust piling up in key offices … critical power centers in [Trump’s] government devoid of leadership.”

As for the federal agencies of most interest to the railroad community, only the two most senior posts requiring Senate confirmation have been filled—both at the Department of Transportation (DOT). Elaine Chao is now Secretary of Transportation, and Jeff Rosen is her deputy. Both have meaningful government experience.

Chao was President George W. Bush’s labor secretary, President George H. W. Bush’s deputy transportation secretary and President Ronald Reagan’s Federal Maritime Commission chairman. She earned an undergraduate degree in economics from Mount Holyoke College and an MBA from Harvard.

Rosen was general counsel at DOT and then the Office of Management and Budget, both in the George W. Bush administration. He earned an undergraduate degree in economics from Northwestern University and a law degree from Harvard.

Nominations have yet to be made for the Federal Railroad Administration (FRA), National Mediation Board (NMB), Pipelines and Hazardous Materials Safety Administration (PHMSA) and Surface Transportation Board (STB).

The President’s transition team has mostly concluded its task, partially vetting candidates now engaged in, or awaiting, extensive background checks leading to actual nomination. Notable is that the time between nomination and Senate confirmation, which includes public hearings before relevant Senate committees, could add months before the posts are actually filled.

The list below is based on identification by at least two independent sources. Some names could be missing, others may be added by the transition team, and some may no longer be interested.

Federal Railroad Administration:

This Executive Branch agency within the DOT regulates safety by promulgating and enforcing regulations, promotes and oversees cooperative labor-management programs, monitors spending by federally subsidized Amtrak, administers federally supported basic and applied rail-safety research, manages federal rail-related grant and loan programs, and sponsors Operation Lifesaver to discourage trespassing and prevent rail-highway grade crossing accidents.

Among candidates for administrator are Ronald L. Batory, John J. Brennan III, Roger Shane Karr and Steve Martinko. Dwayne Bolton is under consideration for deputy administrator.

Ronald L. Batory retires March 31 as president of Conrail, following a 46-year rail operating career that included the presidency of the Belt Railway of Chicago and senior positions at Class I and regional railroads, including general manager in Chicago for Southern Pacific. He earned a bachelor’s in business from Adrian College and a master of arts from Eastern Michigan University. Not since Canadian born Reginald Whitman was administrator (1969-1970), following a 40-year career at Great Northern Railway (1929-1969), has there been one with as comprehensive a rail operating background as Batory.

John J. Brennan III is senior commerce counsel for Union Pacific, responsible for regulatory compliance on freight issues and public-private partnerships. He is lead counsel for the Illinois high-speed rail project, manages legal relationships with Amtrak and Chicago Metra, and negotiated contracts for Amtrak's Ski Train between Denver and the Winter Park (Colo.) Ski Resort. He was Republican staff director and counsel for the U.S. House Rail Subcommittee, and director of operations for the Massachusetts Bay Transportation Authority. He earned an undergraduate degree in English from the University of Massachusetts and a law degree from Suffolk University.

Roger Shane Karr, chief of external affairs for Fiat-Chrysler and formerly a lobbyist for automobile manufacturers and airlines, was DOT’s assistant secretary for government affairs and its deputy chief of staff in the George W. Bush administration. He earned undergraduate and graduate degrees in religion from Texas Christian and Temple universities and a law degree from Georgetown University. His spouse, Elizabeth Barrett Karr, was a special assistant for congressional affairs in the George W. Bush White House and currently is chief of staff to House Majority Leader Kevin McCarthy (R-Calif.).

Steve Martinko, a government affairs counselor with the law and lobbying firm K&L Gates, is a former chief of staff to House Transportation & Infrastructure Committee Chairman Bill Shuster (R-Pa.) and previously was a House Rail Subcommittee senior staff member. He has expertise in artificial intelligence allowing driverless vehicles, infrastructure finance, public-private partnerships, and pipeline and rail safety. Martinko earned an undergraduate degree in history and public policy at Brown University and a master’s in security affairs from the National Defense University.

Dwayne Bolton, being considered for deputy administrator, is a government affairs adviser to Edison International, whose holdings include Southern California Edison. He previously was manager for congressional affairs at the Association of American Railroads and was a legislative aide to Rep. Mike Rogers (R-Ala.). Bolton earned an undergraduate degree from Central Connecticut State University, an MBA from Strayer University and a master’s in transportation policy from George Mason University.

Pipelines & Hazardous Materials Safety Administration:

This Executive Branch agency within the DOT regulates hazardous materials transportation across all modes, coordinating enforcement with the FRA. Among candidates for administrator are Howard (Skip) Elliott, Joseph A. Servidio and Drue Pearce.

Howard (Skip) Elliott, vice president for public safety, health and environment at CSX, focuses on hazmat transportation safety, community emergency preparedness, and homeland security policing in switchyards and terminals. Elliott was trained at the Indiana State Police Academy and held early employment as a “Big” Conrail police officer. He earned an undergraduate degree from Indiana University, with a double-major in forensic studies and English, and a master’s in criminal justice administration from Columbia Southern University.

Drue Pearce is director of government affairs at the Holland and Hart law firm, specializing in legislative and regulatory advice on energy, environment and security issues for utility, local government and energy clients. She is a former Alaska state legislator, Alaska Senate president, a senior adviser on Alaska affairs at the Department of the Interior, and was President George W. Bush’s federal coordinator for Alaska natural gas transmission projects. Pearce earned an undergraduate degree in biological science from Indiana University and a master’s in public administration from Harvard.

Joseph A. Servidio, a U.S. Coast Guard rear admiral, is deputy commander of the Atlantic Area, responsible for missions within 40 U.S. states and extending to the Arabian Gulf. He was deputy commander of a Department of Homeland Security joint task force, special adviser on homeland security to Vice President Joe Biden and a national security strategist at the Pentagon. A graduate of the U.S. Coast Guard Academy, Servidio earned a master’s degrees in engineering from the University of Michigan and a second master’s in national resource strategy from the Industrial College of the Armed Forces.

National Mediation Board:

This three-member independent (of the Executive Branch) regulatory agency administers the Railway Labor Act (applying to airlines as well as railroads), performing mediation for collective bargaining disputes, providing voluntary alternative dispute resolution programs and managing binding arbitration in settlement of contract interpretation.

Republican member Nicholas Gael resigned to accept a Trump Administration direct appointment at the Labor Department, leaving Democrats Harry Hoglander and Linda Puchalla serving expired three-year terms. It is likely that Trump will leave Puchalla in place for now to provide continuity, as the NMB statute permits members to remain indefinitely beyond expiration of their terms pending Senate confirmation of successors.

Among candidates for Republican slots are David A. Banmiller, Gerald W. (Trey) Fauth III, Kyle Kirsten Hicks and Frank Vincent Vernuccio.

David A. Banmiller is a career commercial airlines executive. Now a management consultant, he was president of Aloha Airlines and Pan American World Airways, and held senior positions with other regional and international airlines. He is linked, through a financial restructuring of Aloha Airlines, to Trump adviser and former New York Mayor Rudy Giuliani through Giuliani Capital Advisors (formed from Ernst & Young’s investment banking practice and subsequently resold). Banmiller earned an undergraduate degree in business administration from Villanova University and a MBA from Loyola Marymount University.

Gerald W. (Trey) Fauth III has been associated with railroad economics and consulting since 1978 at G.W. Fauth & Associates, founded in 1957 by his late father, and at which he is now president. Fauth served almost four years as chief of staff to STB Republican member Wayne O. Burkes, where he was involved with labor arbitration and dispute resolution techniques arising from rail mergers and the resultant harmonizing of separate collective bargaining agreements. He earned an undergraduate degree in history and government from Hampden Sydney College, and  whose sister is married to U.S. Sen. Richard Burr (R-N.C.).

Kyle Kirsten Hicks is labor policy director for the Senate Labor Committee. She formerly was a policy analyst for the Senate Republican Policy Committee and was legislative counsel to Sen. Tim Hutchinson (R-Ark.) and Rep. Spencer Bauchus (R-Ala.). She earned an undergraduate degree in history from the University of Colorado and a law degree from The George Washington University. Her husband, Joseph (Joby) Fortson, is a congressional lobbyist—currently for consumer research firm Nielson and previously for Apple—and a former counsel to the House Energy and Commerce Committee.

Frank Vincent Vernuccio, a member of the Trump transition team for the Department of Labor, is director of labor policy at Michigan’s Mackinac Center for Public Policy and a senior fellow at the Illinois Policy Institute. He is a former frequent contributor to Breitbart News and was labor policy counsel to the Competitive Enterprise Institute. During the George W. Bush administration, when Chao was labor secretary, Vernuccio was a special assistant to the assistant secretary of labor for administration and management. He earned an undergraduate degree in political science from the State University of New York in Oneonta and a law degree from Ave Maria School of Law.

STB Transportation Board:

The 2015 Surface Transportation Board Reauthorization Act increased the size of this independent (from the Executive Branch) agency from three to five members, but President Obama did not make nominations to fill the new seats.

The three-member board has an acting chairman, Republican Ann Begeman (whose second term expires Dec. 31, 2020), and two Democrats—former Chairman Dan Elliott (whose second term expires Dec. 31, 2018) and Deb Miller (whose first term expires Dec. 31, 2017). By statute, STB members may remain only 12 months beyond the expiration of their five-year term, or until successors have been Senate confirmed. STB members are limited to two terms.

The STB will remain with a Democratic majority until two new Republicans are nominated and confirmed to create a 3-2 Republican majority.

In the meantime, Begeman, Elliott and Miller are in agreement to delay, pending anticipated arrival of the two new members, voting on matters of significant economic importance to railroads and shippers. Two such issues are whether and how to revise a complex test for determining maximum allowable freight rates for shippers lacking effective transportation alternatives to rail, and whether and how to permit so-called competitive switching at certain sole-served facilities to afford a second railroad choice.

Among candidates for the Republican slots are Mark L. Burton, Zane Duncan, Jerry Ellig and Keith Hartwell.

Mark L. Burton is director of transportation economics at the University of Tennessee’s Transportation Research Center. His focus is railroads and the economics of public-private partnerships. In 2016, he participated, with other academics and representatives of the STB, at a Georgetown University symposium exploring “Economics and Regulation of the Freight Rail Industry.” He has written on alternative methods for determining railroad revenue adequacy. Burton earned undergraduate and doctoral degrees in economics from the University of Missouri and University of Tennessee. His doctoral dissertation was “Railroad Deregulation and Rail Rates.”

Zane Duncan, son of Rep. John Duncan (R-Tenn.), is currently a governor-appointed member of the Tennessee Board of Parole and was a Tennessee county property assessor prior to employment as a regional public relations manager for rail shortline operator and rail services provider R.J. Corman. He also was employed by the Air Transport Association. His older brother was briefly married to a former staff member of the House Rail Subcommittee. Zane earned an undergraduate degree in kinesiology from Lincoln Memorial University.

Jerry Ellig, a senior research fellow at George Mason University’s Mercatus Center, specializes in the regulatory process. He has associated deregulation with improved rail safety and criticized Congress for failing to perform benefit/cost analysis on the positive train control mandate or consider alternatives. He co-authored a 2015 Transportation Research Board study concluding that “more appropriate, reliable and useable procedures are needed” to resolve rail rate disputes, and that STB regulations “have not kept pace” with changes to the “modern rail system.” He earned an undergraduate degree in economics from Xavier University and his Ph.D in economics from George Mason.

Keith Hartwell, now retired, was a founder and president of the rail consultancy Chambers, Conlon & Hartwell that specializes in short line railroad creation, development and finance. He has expertise in writing proposals for loans and grants under the Railroad Rehabilitation and Improvement Financing program, led congressional lobbying efforts to secure and extend rail rehabilitation tax credits and was an originator of Railroad Day on Capitol Hill. He was a legislative assistant and chief-of-staff to former Rep. Marvin Esch (R-Mich). Hartwell earned an undergraduate degree in political science from the University of Michigan.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Frank N. Wilner, Contributing Editor

Frank N. Wilner is author of six books, including, Amtrak: Past, Present, Future; Understanding the Railway Labor Act; and, Railroad Mergers: History, Analysis, Insight. He earned undergraduate and graduate degrees in economics and labor relations from Virginia Tech. He has been assistant vice president, policy, for the Association of American Railroads; a White House appointed chief of staff at the Surface Transportation Board; and director of public relations for the United Transportation Union. He is a past president of the Association of Transportation Law Professionals.

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